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On Wednesday the supreme court ruled that when litigants seek to resolve a dispute in an out-of-court settlement, without the intervention of the court under section 89 of the Civil Procedure Code(CPC), they are entitled to receive the refund of their court fees. The bench comprising Justices Mohan M Shantanagoudar and Vineet Saran observed that in this regard section 89 of the CPC should be interpreted in a liberal manner that would ensure accomplish its object and purpose.
This a case of a dispute between two parties regarding a hire purchase agreement. The case reached the high court after it went through the munsif and the district courts. While the case was pending in the high court, the parties decided to opt for an out-of-court settlement without the intervention of the court, they also resolved the controversy between them. After that, the respondent who filed the appeal withdrew it from the court and requested a refund of the court fee. The Registry, however, denied the respondent's appeal for repayment of court fees orally. The respondent made an appeal to the Madras High Court. On 8 January 2020, the High Court ruled against its own registry and assented to the plea.
The High Court subsequently moved an appeal to the Supreme Court.
The Madras High Court considered Section 69-A of the Tamil Nadu Court Fees and Suit Valuation Act, 1955 while raising the issue of whether the repayment of court fees was allowable under the relevant laws. The law allows for the repayment of the court fees when the disputes are settled under Section 89 of the Code of Civil Procedure.
The main contention of the petitioner was that under section 69A of the 1955 act when the court directs for an alternate dispute redressal mechanism mentioned in section 89 of the CPC to the parties of the case. Refund of court fees can be provided, but in this case, the parties without any directions by the court have privately opted for an out-of-court settlement under section 89 of the CPC.
The supreme court after examining the intent and scope of section 89 of the CPC held that :
A narrow interpretation of Section 89 of the CPC and Section 69-A of 1955 which the petitioner has argued, would only lead to the result that parties referred to by the Court for mediation or arbitration would be entitled to a full refund of their court fee, while those parties saving the time and resources of the Court by privately resolving their dispute themselves will not be provided with the refund of the court fee. Which is unjust and against the purpose of the above-mentioned provisions. Therefore, the court upheld the judgment of the High Court and dismissed the appeal
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